In an effort to explain why business acquisitions often fail, scholars

(Book Question: 427)
According to the passage, the research mentioned in line 6 suggests which of the following about lower-ranked top executives and post acquisition success?
A. Given that these executives are unlikely to contribute to postacquisition success, little effort should be spent trying to retain them.
B. The shorter their length of service, the less likely it is that these executives will play a significant role in postacquisition success. - This is a RBV proponent view.
C. These executives are less important to postacquisition success than are more highly ranked top executives. - Stated in passage
D. If they have long tenures, these executives may prove to be as important to postacquisition success as are more highly ranked top executives. - Not stated in passage
E. Postacquisition success is unlikely if these executives are retained. - Out of scope/ Passage does not mention about failure of acquisition if such employees are retained, instead it talks about success if top executives are retained.

Question Type - Supporting Idea
Answer - (C)
Line No. 7 to 10 states - "Furthermore, existing research suggests that retaining the highest-level top executives, such as the CEO (chief executive officer) and COO (chief operating officer), is related more positively to post acquisition success than retaining lower-ranked top executives."


(Book Question: 428)
The resource-based view, as described in the passage, is based on which of the following ideas?
A. The managerial skills of top executives become strongest after the first five years of their tenure. - Out of Scope
B. Company-specific knowledge is an important factor in the success of an acquisition process.
C. The amount of nontransferable knowledge possessed by long-tenured top executives tends to be underestimated. - RBV does not underestimate
D. Effective implementation of an acquisition depends primarily on the ability of executives to adapt to change. - UEP View
E. Short-tenured executives are likely to impede the implementation of a successful acquisition strategy. - RBV talks about positive inputs from retained top executives and not ill-effect of short tenured eecutives

Question Type - Evaluate
Answer - (B)
My query with the ans is, it mentions success of an acquisition process - (Acquisition process/ Implementation/ Post acquisition) Such differences would matter if solving a 700+ lvl question
Line 21 says - The resource-based view (RBV) suggests that keeping acquired company top executives with longer organizational tenure would lead to more successful outcomes, as those executives have idiosyncratic and nontransferable knowledge of the acquired company that would be valuable for the effective implementation of the acquisition.
Line No 45 - While longer tenured top executives may have trouble adapting to change, it appears that their perspectives and knowledge bases offer unique value after the acquisition.


(Book Question: 429)
The passage suggests that Bergh and a proponent of the upper echelons perspective would be most likely to disagree over which of the following?
A. Whether there is a positive correlation between short organizational tenure and managerial adaptability
B. Whether there is a positive correlation between long organizational tenure and the acquisition of idiosyncratic and nontransferable knowledge
C. Whether adaptability is a useful trait for an executive who is managing an acquisition process
D. Whether retaining less-tenured top executives of an acquired company is an optimal strategy for achieving postacquisition success
E. Whether retaining highest-level top executives of acquired companies is more important than retaining lower-ranked top executives

Question Type - Evaluate
Answer - D
The justification here is Bergh discussed only about the (tenure = knowledge) of the executive in his study,
whereas UCP discussed only about (tenure = adaptability)
Hence an option talking about adaptability or knowledge is out - A / B / C
Option (E) talks about highest ranked and lower ranked executives and not their tenures. - Out
After elimination - Answer is D - and it also follows the flow of the question - disagreement is on optimal acquisition strategy.

Now my query in question (2) solidifies - Question 2 states Implementation process whereas this question states post acquisition.
It is a nimble difference but if noticed can alter the answer for a specific question.


(Book Question: 430)
According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?
A. It did not address how the organizational tenure of top executives affects postacquisition success.
B. It did not address why some companies have longer-tenured CEOs than others.
C. It did not consider strategies for retaining long-tenured top executives of acquired companies.
D. It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
E. It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Question type - Inference
Answer - A
Justification - Line no. 12 - "two limitations. First, the focus on positional rank does not recognize the variation in length of service that may exist in top executive posts across companies"


egmat mikemcgarry ankurgupta03 sayantanc2k

Passage breakdown

In the first paragraph (P1), the author exposes some flaws in a study, then presents a debate regarding those flaws:

• The flaws: the study failed to examine how acquisition success is impacted by how long retained executives had worked for the company
• One side of the debate (the RBV view): keeping executives with longer tenure leads to success
• The other side (UEP): keeping executives with shorter tenure leads to success.

In the second paragraph, the author cites research that supports the RBV theory introduced in P1.


For more on the process of breaking down RC passages, check out this article and our live RC videos.

Explanations for individual questions

• Question 2
• Question 3
• Question 4
  
  • Part 1
  • Part 2

(Book Question: 430)
According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?
A. It did not address how the organizational tenure of top executives affects postacquisition success.
B. It did not address why some companies have longer-tenured CEOs than others.
C. It did not consider strategies for retaining long-tenured top executives of acquired companies.
D. It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
E. It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Question type - Inference
Answer - A
Justification - Line no. 12 - "two limitations. First, the focus on positional rank does not recognize the variation in length of service that may exist in top executive posts across companies"

You're quoting the wrong section here. Limitation 1 as stated in the passage talks about the variation in length of service that may exist in top executive posts across companies....it talks about inter-companies variance in the respective tenures.

It was the theoretical explanations regarding the second Limitation (pertaining to length of service ) that had opposing view...Berjh collected data for 5 years and hence was able to support one theory and addressed how the organizational tenure of top executives affects post-acquisition success i.e. length of tenure is directly proportional to the post acquisition success(same as option A). Hence he addressed Limitation 2.

Regards
SR

I have a question regarding 430.
(Book Question: 430)
According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?
A. It did not address how the organizational tenure of top executives affects postacquisition success.
B. It did not address why some companies have longer-tenured CEOs than others.
C. It did not consider strategies for retaining long-tenured top executives of acquired companies.
D. It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
E. It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Aren't RBV and UEP studies conducted before Bergh's study? If so, there are some studies which took CEO's tenure into consideration than how is A a correct answer?

This passage should not take more than 6 minutes to solve .

you should take 15min to 2 min at max to rad the paragraph

STEP 1 : Read the first few line of Passage.Get the TOPIC/SCOPE of the passage
Topic/Scope :
Write down on the scratch pad

STEP 2: Specialty of the passage as to why Author is writing this passage.
Mostly this will be in the second line of the passage
Specialty :
Write down on the scratch pad.

STEP 3: Next lines should simply describe either topic or specialty or supporting ideas or evidence.
Don't Even read these lines , you can always come back to these lines as long as you have your notes from STEP 1/STEP 2.

STEP 4: Very important ,
4a) SKIM for change in direction (Ex: However , yet , but, Despite, in spite, Although , even though ,Nonetheless, )
And note this change in Idea.
4b) SKIM for Tonal Words and note this tonal idea.(Ex: Unfortunately, one enemy , someone came in right timing,
truly , admittedly, unwillingly , and note this down.

Now you have to look at the scratch pad between STEP 1/STEP 2 and STEP 4 and carefully look what exactly is the CHANGE OF IDEA/Tonal Variation.

Repeat this for every Paragraph.Overall you should read only 4 to 5 sentences in the entire Passage in 1 to 2 minutes.

Notes should look like for each paragraph,
TOPIC/SCOPE:
SPECIALTY :
CHANGE in IDEA:
Not down any Nouns, Dates, Names etc....You can always come back to this section

Note:for some paragraphs you might not see any CHANGE in IDEA or any tonal variation so just get STEP 1/STEP 2 for that Paragraph

SPEND most of the time in reading question and reading ALL answer choices very carefully.
With this you can easily crack RC.

GMATNinja GMATNinjaTwo
Book Q: 429
The passage suggests that Bergh and a proponent of the upper echelons perspective would be most likely to disagree over which of the following?
A. Whether there is a positive correlation between short organizational tenure and managerial adaptability
B. Whether there is a positive correlation between long organizational tenure and the acquisition of idiosyncratic and nontransferable knowledge
C. Whether adaptability is a useful trait for an executive who is managing an acquisition process
D. Whether retaining less-tenured top executives of an acquired company is an optimal strategy for achieving postacquisition success
E. Whether retaining highest-level top executives of acquired companies is more important than retaining lower-ranked top executives

I am confused with correct strategy to answer this question. The passage suggests that Bergh supported RBV and this question asks what people who supported UEP (or opposed RBV) would disagree with? How can both mean the same thing?

The passage suggests that Bergh and a proponent of the upper echelons perspective would be most likely to disagree over which of the following?
A. Whether there is a positive correlation between short organizational tenure and managerial adaptability
No because the debate is on the post acquisition success .
So the correlation has to be between Organizational tenure and post acquisition success.

B. Whether there is a positive correlation between long organizational tenure and the acquisition of idiosyncratic and nontransferable knowledge
Again the correlation has to be between Organizational tenure and post acquisition success.

C. Whether adaptability is a useful trait for an executive who is managing an acquisition process
No. Adaptability is a reason given by UEP as to why short organizational tenure executives will have impact on post acquisition success.

D. Whether retaining less-tenured top executives of an acquired company is an optimal strategy for achieving post acquisition success
CORRECT. Direct answer .

E. Whether retaining highest-level top executives of acquired companies is more important than retaining lower-ranked top executives
The contrast between Bergh and UEP is whether tenure plays an important role on post acquisition success not on the position of executivels
Question 3

Hi,

I'm still not sure about the explanation for 430:

(Book Question: 430)
According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?
A. It did not address how the organizational tenure of top executives affects postacquisition success.
B. It did not address why some companies have longer-tenured CEOs than others.
C. It did not consider strategies for retaining long-tenured top executives of acquired companies.
D. It failed to differentiate between the contribution of highest-level top executives to postacquisition success and that of lower-ranked top executives.
E. It underestimated the potential contribution that lower-level top executives can make to postacquisition success.

Doesn't D refer to the following line : "or does it address which particular top executives (with respect to length of service) should be retained
to achieve a successful acquisition outcome"?

The Lines - 13 to 17

"First, the focus on positional rank does
not recognize the variation in length of service that
may exist in top executive posts across companies,
(15)
nor does it address which particular top executives
(with respect to length of service) should be retained
to achieve a successful acquisition outcome. "

The length of service refers to which of these ??

a) The tenure spent in the company

or

b) The tenure left in the company

A top company executive may be quite young but quite inexperienced in the company , so his tenure completed in the company may be short but his tenure to ;ead the company will be quite long .

Which tenure/length of service is mentioned in the lines 13 to 17 ??

p1 - business acquisitions fails, a reason given, then in what cases that reason is not good.
P2 - on these limitation, Bergh gave more reasons on acquisition success

(Book Question: 427)
According to the passage, the research mentioned in line 6 suggests which of the following about lower-ranked top executives and post acquisition success?
Ans - retaining them is not a good idea.
A. Given that these executives are unlikely to contribute to post acquisition success, little effort should be spent trying to retain them. --- not the correct reason.
B. The shorter their length of service, the less likely it is that these executives will play a significant role in post acquisition success. --- this is given as flaw
C. These executives are less important to post acquisition success than are more highly ranked top executives. --- to the point
D. If they have long tenures, these executives may prove to be as important to post acquisition success as are more highly ranked top executives. --- no
E. Post acquisition success is unlikely if these executives are retained. --- no
-----------------------------------------
(Book Question: 428)
The resource-based view, as described in the passage, is based on which of the following ideas?
lines to read - The resource-based view (RBV) suggests that keeping acquired company top executives with longer organizational tenure would lead to more successful outcomes, as those executives have idiosyncratic and nontransferable knowledge of the acquired company that would be valuable for the effective implementation of the acquisition.
B. Company-specific knowledge is an important factor in the success of an acquisition process.
------------------------------------------

(Book Question: 429)
The passage suggests that Bergh and a proponent of the upper echelons perspective would be most likely to disagree over which of the following?
A. Whether there is a positive correlation between short organizational tenure and managerial adaptability -- just talking about Bergh's view.
B. Whether there is a positive correlation between long organizational tenure and the acquisition of idiosyncratic and nontransferable knowledge --- UEP's view
C. Whether adaptability is a useful trait for an executive who is managing an acquisition process --- no
D. Whether retaining less-tenured top executives of an acquired company is an optimal strategy for achieving post acquisition success --- they differed on less-tenured top executive
E. Whether retaining highest-level top executives of acquired companies is more important than retaining lower-ranked top executives --- both agree at some point that retaining top executives is good.
------------------------------------------

(Book Question: 430)
According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways
Q - Role of top executive before Bergh’s study.
Ans - So suppose they are retained. now what will they do. it is not mentioned in the passage. A is on the same lines.
A. It did not address how the organizational tenure of top executives affects postacquisition success.

According to the passage, prior to Bergh’s study, research on the role of top executives of acquired companies in business acquisition success was limited in which of the following ways?

One thing to consider when answering this is that Bergh's study followed 104 acquisitions over a 5 year period - a longer term and thus more conclusive evidence. Prior to Bergh's research, scholars merely concluded that tacit knowledge (as inherit in RBV staff) is important to post-acquisition success, but there was no evidence clarifying WHY it was important or how post-acquisition success was measured.

Hi GMATNinja

On Question 430, Why isn't B right ...

Below is an excerpt in blue specifically from the passage that refers to B does it not ? The blue clearly says, there is a limitation because
a) across companies, some people may be forced to be at certain levels longer based on organizational structure (Atleast thats my inference of the blue) ...This is exactly what option B is per my understanding


Excerpt from passage

First, the focus on positional rank does not recognize the variation in length of service that may exist in top executive posts across companies, nor does it address which particular top executives (with respect to length of service) should be retained to achieve a successful acquisition outcome

The portion of the passage that you highlighted in blue doesn't actually contain the information you added in your inference!

How long top executives have been in their roles could vary because of any number of factors. Maybe they stayed in the same role forever because their commute to work is convenient, or maybe they just got promoted because they bribed HR with donuts every day. It could be that they were "forced to be at certain levels longer based on organizational structure," as you inferred, but the passage does not specify this information.

Our task in answering this question is to determine how research prior to Bergh's study was limited. Answer choice (B) focuses on why some companies have longer-tenured CEOs, but that is not the limitation that Bergh identifies addresses in his study.

You found the relevant portion of the passage to answer this question, but misinterpreted the exact meaning of the sentence. Let's take a closer look:


This means that just studying someone based on their position (CEO, CFO, etc.) does not account for how long they have been in that role.


This means that the previous research does not provide a link between keeping long vs. short tenured executives and the success of an acquisition.

With this in mind, let's go back to answer choice (A):


This answer choice mirrors the limitation in the previous research as explained above. (A) is our answer.

I hope this helps!

Hi

IN question 429
Can someone please explain why option E is a statement that is agreed by Bergh and UEP?

I eliminated this option since I inferred that UEP doesnot talk about preference between high ranked top executives and low ranked top executives. 

My understanding:

Uep is one of the theories that are presented as part of the objection to the following explanation:

 Retaining the highest-level top executives is related more positively to post-acquisition success than retaining lower-ranked top executives.

UEP states that low tenure leads to more postacquision success.

Now Bergh conducted research whose findings suggested that high ranked top executives (long tenure) are more successful than other top executives(short tenure) in post-acquisition success.




Now in both these explanations, it doesnot talk about the preference of higest level top executives to lower ranked top executives.

then how can both of them agree on option E?


Regards

Nitesh

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MartyTargetTestPrep

Hi Nitesh.

RC questions can be set up to challenge test takers by involving concepts that seem the same or can somehow be confused with each other by test-takers. So, to correctly answer RC questions, one has to be sure to keep concepts straight.

In this case we have two concepts that can be confused with each other. They are:

- level within the company.

- length of tenure (or length of time spent) at the company.

If you go back through the passage, you will see that RBV, and specifically Bergh, and UEP actually agree on the need to retain high level executives and that their disagreement centers on executive tenure, in other words, how long the executives have been at the companies.

So, (E) mentions something that they agree on, while (D) mentions something that they disagree on.

Hi MartyTargetTestPrep
If you go back through the passage, you will see that RBV, and specifically Bergh, and UEP actually agree on the need to retain high level executives and that their disagreement centers on executive tenure, in other words, how long the executives have been at the companies.

^^^
THis is what i have not been able to find conclusively.





furthermore, existing research suggests that retaining the highest-level top executives, such as the CEO (chief executive officer) and COO (chief operating officer), is related more positively to postacquisition success than retaining lower-ranked top executives. However, this explanation, while insightful, suffers from two limitations.

The However in the text indicates the contrast/limitations of the theory.
the 2nd limitation presents 2 theories that do not agree on tenure aspect to achieve postacquisition success.
Bergh agrees with the former theory.(RBV).


How can we infer that both of RBV and UEV positions agree on highest-level top executives of acquired companies is more important than retaining lower-ranked top executives?

Can you try quoting the passage to try and explain me the inference?

Thank you for your time

Regards
Nitesh

"existing research suggests that retaining the highest-level top executives, such as the CEO (chief executive officer) and COO (chief operating officer), is related more positively to postacquisition success than retaining lower-ranked top executives."

Neither RBV nor UEP is described as disagreeing with the above suggestion. Rather the more logical interpretation of the passage is that they are examples of schools of thought in that that agree with that suggestion as the passage describes the two schools of thought as different in their takes on retaining "top executives."

At the same time the passage describes the two as disagreeing as described below.

"The resource-based view (RBV) suggests that keeping acquired company top executives with longer organizational tenure would lead to more successful outcomes, as those executives have idiosyncratic and nontransferable knowledge of the acquired company that would be valuable for the effective implementation of the acquisition. The opposing position, offered by the upper echelons perspective (UEP). suggests that retaining top executives having short organizational tenure would lead to more successful outcomes ..."

We can concede that the passage never directly states that the two schools of thought agree on the point related to level of executives. However, by introducing the highest-level top executives conclusion and then the two schools of thought, and by associating both schools of thought with "top executives" it does seem to indicate that they agree on the point related to level of executives. At the same time, what you are saying makes some sense, and perhaps I went slightly too far in saying that the passage indicates that they agree on that point.

At the same time, question 429, does not ask us whether they agree on that point. Rather it asks us to identify a point of DISAGREEMENT, and the passage clearly does not indicate that they disagree on the the point related to levels of executives. It indicates that they disagree on the point related to tenure.

Vision, finding key details, and clarity are key.